EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840426
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Toyota Tsusho Australisia applied for a TCO in respect of certain non vulcanisable thermoplastic on 19 November 2008.
Instrument
TCO No 0840426 was made on 27 February 2009. It declares that those certain non vulcanisable thermoplastic are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0840426 is taken to have come into force on 19 November 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, provides for the regulation of customs duties, including the imposition of tariff concession orders (TCO) to reduce customs duty on certain goods. The Act was introduced to streamline and facilitate international trade by providing tariff concessions under specific conditions, thereby encouraging the import of goods that are not produced domestically. The instrument in question, Tariff Concession Instrument No. 0840426, was made by the Chief Executive Officer of Customs on 27 February 2009, following an application by Toyota Tsusho Australisia on 19 November 2008. The instrument grants a tariff concession on certain non-vulcanisable thermoplastic, reducing the customs duty from the general rate of 5% to free, provided that no substitutable goods were produced in Australia on the date of the application. The policy objective is to support importers by reducing the cost of imported goods, while ensuring that no existing rights or liabilities of any person are adversely affected.
Scope and Application
The Customs Act 1901 applies to entities and individuals involved in the importation of goods into Australia, particularly those seeking tariff concession orders (TCOs) for specific goods. The Act is administered by the Chief Executive Officer of Customs (CEO), who is responsible for assessing applications for TCOs under section 269F and deciding whether they meet the core criteria outlined in section 269C. These criteria require that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D, 269E and 269F. If the CEO determines that the application meets the core criteria, they must issue a written order declaring the goods subject to the TCO. The Act has national jurisdiction and applies across the Commonwealth of Australia. Exclusions include goods specified in section 269SJ, which cannot be subject to a TCO. The Act's application may be extended or restricted through subordinate instruments, such as regulations, which provide further detail on the tariff concession process and administration.
Key Provisions
The Tariff Concession Instrument No. 0840426, under the Customs Act 1901, establishes a tariff concession order (TCO) for certain non-vulcanisable thermoplastics, which applies from 19 November 2008 (sections 269K(1), 269S(1)). This order, which was made on 27 February 2009, exempts these goods from the general duty rate of 5% and sets the duty at free (section 269P(3)). The Chief Executive Officer of Customs (CEO) must ensure that no substitutable goods are produced in Australia when deciding to grant a TCO, as outlined in sections 269B, 269C, and 269D. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received for this TCO (section 269K(1)).
The Act imposes specific obligations on the CEO in processing TCO applications. Firstly, the CEO must evaluate whether the application complies with the core criteria outlined in section 269C. This involves verifying that no substitutable goods are being produced in Australia on the date the application is lodged, as defined by sections 269B and 269D. Should the CEO determine that the application meets these criteria, they are mandated to issue a written TCO order specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette to allow for public submissions regarding the application, though in this case, no submissions were received (section 269K(1)).
In terms of potential consequences for non-compliance or breach of the provisions under this TCO, the Act does not explicitly state any specific offences, penalties, or civil or criminal consequences for failure to adhere to the terms of the TCO. However, it is implicit that any misuse or fraudulent claims related to the concession could lead to penalties under the broader Customs Act 1901. For example, penalties for providing false or misleading information when applying for a TCO could result in fines or imprisonment as per the general provisions of the Act. Furthermore, any actions that contravene the Customs Act, such as smuggling or evading duty, could attract severe penalties including substantial fines and imprisonment.